After years of declining consumption, fluid milk sales are increasing! In the prior post, the consumption of butter and cheese was reviewed. Butter consumption continues to increase and cheese consumption is showing very minor increases. Fluid milk purchases are increasing, and it is partially for the same reasons that butter is increasing. The data below includes only dairy milk, no “plant based” milk is included.
Chart I below shows the retail sales of fluid milk. In mid 2023, sales ceased declining and in 2024, sales have increased.
WHICH CATEGORIES ARE INCREASING?
There are three categories that are increasing, whole milk, organic milk, and “other” milk.
Whole milk sales are plotted in Chart II. They have been increasing for three years. Whole milk must contain at least 3.5% butterfat. Any amount above this is shipped to butter churners. Concerns about saturated fats in milk have driven sales down, but more recently the medical community has seen health value in dairy products when consumed in moderation. The increases in fluid milk sales are like butter consumption in the prior post. In 2022, sales of whole milk and 2% milk were equal. Now whole milk has a 10% larger volume in sales.
Organic milk is setting new sales records as many consumers are favoring organic products. As shown in Chart III, a new record in organic milk sales has recently been achieved. This is a long-term trend. The rise in 2020 was the result of the COVID “stay at home” policies. After that, sales declined, then leveled out, and are now rising to new highs.
The “Other” milk sales (Chart IV) are showing long-term growth and are now selling more than fat-free milk. What is in the “Other” milk category, and why is it growing? The “Other” category includes things like yogurt, ice cream, lactose-free milk, and other minor dairy products. Lactose-free milk has been increasing, and one of the leading brands, Fairlife, owned by Coca-Cola, is always lactose-free and is seeing tremendous growth. Further growth can be expected in this category.
WHAT CATEGORIES ARE DECLINING?
Three categories are declining, 2% milk, 1% milk, and fat free milk.
Two percent fat milk sales have been declining for a longtime. Over the last seven years, sales have declined by 19%. A lot of this 2% milk volume loss is moving to whole milk.
One percent fat milk (Chart VI) has a long history of declines, but in 2023 and 2024, sales have leveled out. Have they reached bottom?
Fat Free Milk (Chart VII) has very limited sales and the sales are continuing to decrease. Eventually, they may disappear from grocery shelves.
WHAT IS THE IMPACT OF CURRENT TRENDS AND CHANGES?
Class I milk is the highest-priced milk, and an increase in Class I milk will increase the weighted average of the Uniform price.
More fluid milk with 3.5% butterfat adds to the butterfat availability strain.
How is consumer demand for butterfat being met? Some butterfat is being harvested from Class III milk for cheese to fill demand. Typically, to meet the protein/butterfat ratio, protein was added, often by adding nonfat dry milk. There is a trend to remove some butterfat to meet these ratios and use that butterfat for butter.
Lactose-free milk is gaining in popularity. And may soon reach a level where it is displayed as a separate category.
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